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Category: Corporate Relocation

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Corporate Relocation Domestic Relocation Domestic Relocation Tips Domestic Relocation Trends United States Economy

Texas Relocation: The Lone Star State Continues to Draw Companies

Welcome to Texas state road sign at the state border

Many companies have a Texas relocation as part of their corporate objectives. Trends show the state of Texas as a top destination for company facilities and corporate headquarters looking to relocate. These trends span quite a length of time. Companies leaving California have chosen to move to Texas more than any other state for each of the past 12 years.

Every state has many benefits for the companies that choose to relocate there. Some US cities and states offer a number of incentives for people to move as well. Southern California in particular is known for great amenities such as excellent weather, expansive and beautiful beaches, and the growth of dynamic industries. What is it about the Lone Star State that makes a Texas relocation so attractive for companies?

Benefits of a Texas Relocation

Companies looking at future trends and the possibility of relocation often consider several factors in their decision. Company location may determine future growth and business viability. For example, technology companies might need to consider a location with access to a highly educated workforce, capital markets, and critical infrastructure such as fiber optic technology for broadband internet service. Other companies may consider tax issues, or ways to increase corporate synergies following an acquisition.

What are the Factors That Make a Texas Relocation a Good Business Decision?

When it comes to a Texas relocation, companies consistently cite a few factors as critical to their decision. While taxes often make the news, other factors also have a significant impact on these decisions. Besides taxes, companies note housing affordability and livability for employees, utility costs, labor costs, and business regulations.

Texas Taxes

Texas has no state income tax. It also has no corporate income tax. These two taxes often are significantly burdensome in other states. For example, the corporate tax rate in California is 8.84%. However, Texas does has a form of gross receipts tax on businesses, the Corporate Franchise Tax. This tax rate is 0.75% of margin for most businesses, and a lower rate of 0.375% for businesses in the retail and wholesale industries.

Lone Star Livability

Livability is a somewhat subjective term. What makes one place more livable than another place? Examining a few key indicators can help shape a good perspective on livability. Wage differences should be considered with the cost of living in a location. State policies on health insurance may skew numbers—especially if the health insurance is not comparable to what is available in other markets.

One of the most important factors in any consideration of livability is the cost of housing. Overall, Texas continues to be one of the most affordable states for housing. Other states face a significant percentage of residents who want to move, often due to housing costs. Some states have already seen thousands of residents depart due to affordability and livability issues.

Lower Utility Costs Energize Texas Relocation

Electricity rates in Texas tend to be significantly lower than the national average. This holds true for residential, commercial, and industrial electricity rates. Natural gas rates are also lower than the national average in Texas. Texas also produces the most crude oil and natural gas in the nation.

Labor Costs in Texas

A large part of labor costs are the taxes employers pay. While salary and wages make up the majority of direct costs, payroll-related taxes can be considerable. Most of these taxes in Texas have comparatively low minimums. As a result, employers pay less overall in payroll-related taxes in Texas than they would in other states. Also, the vast majority of Texas counties have wages that are lower than the national average.

Business Regulations Drive Texas Relocation

Texas consistently ranks in the number one position for its business-friendly climate. The Small Business and Entrepreneurship Council reports that Texas leads all states when it comes to both its policy and tax environments.

Top 10 States on the Policy Index 2019Top 10 States on the Tax Index 2019
1. Texas1. Texas
2. Nevada2. South Dakota
3. Florida3. Nevada
4. South Dakota4. Wyoming
5. Wyoming5. Florida
6. Indiana6. Washington
7. Utah7. Ohio
8. Alabama8. Colorado
9. Arizona9. Alaska
10. Washington10. Alabama

Source: Small Business and Entrepreneurship Council.

What Does a Texas Relocation Mean for Employers?

Companies may consider relocating their headquarters or other facilities for a number of reasons. Most companies consider factors such as regulations, taxes, and livability as they examine a possible Texas relocation. As a result, Texas consistently rises to the top of the list due to several factors. These include lower tax rates, low energy costs, lower costs of labor, favorable cost of living, and business-friendly policy and tax environments.

Conclusion

GMS’ team of corporate relocation experts has helped thousands of our clients develop plans and processes to ensure a successful and efficient corporate relocation. As a result, our team can help your company with its planning and research for a possible Texas relocation.

GMS was the first relocation company to register as a .com. The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

Learn best practices from Global Mobility Solutions, the relocation industry and technology experts who are dedicated to keeping you informed and connected. Contact our experts online to learn whether a Texas relocation would be a good move for your company, or give us a call at 800.617.1904 or 480.922.0700 today.

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Corporate Relocation

What are the Top 10 US States for Inbound Moves?

Inbound moves from one US state to another often reflect broad social and economic trends. Mark J. Perry recently published an article through the American Enterprise Institute on this topic. A review of the data and specific points helps tell the story behind the numbers. The state of Arizona is ranked as the #1 state for inbound moves.

This ranking is highly touted by the state as proof of its successful approach to balanced economic growth. Arizona Governor Doug Ducey cites the state’s growing economy, daily influx of hundreds of new residents, and a fiscally conservative state budget. Notably, the state’s budget has risen from a $1 billion deficit in 2015 to a $1 billion surplus in 2019, with a record-high balance in the state’s “Rainy Day Fund” of over $1.014 billion.

Top 10 States for Inbound Moves

The top 10 states for inbound moves, in order, are:

  1. Arizona
  2. Idaho
  3. Nevada
  4. Maine
  5. North Carolina
  6. South Carolina
  7. Vermont
  8. Florida
  9. Montana
  10. Texas

The top 10 states for outbound moves—meaning more residents chose to leave these states, in order, are:

  1. New York
  2. Illinois
  3. New Jersey
  4. California
  5. Connecticut
  6. Hawaii
  7. Massachusetts
  8. New Mexico
  9. Alaska
  10. Louisiana

Factors Driving Inbound Moves

Of the states experiencing the highest amount of inbound moves, significant factors drive these moves. These factors include local costs, taxes, economic growth, and employment measures.

Local Costs

Home prices for the top 10 states that experience the highest number of inbound moves are significantly lower than home prices of the top 10 outbound states. For the top 10 inbound group, average home prices are $231,250. This amount is $99,900 lower than the average for the top 10 outbound group of $331,150.

Average electricity costs are also significantly lower in the top 10 states for inbound moves. These states have an average electricity cost of 10.71 cents per kilowatt hour. By comparison, the average cost for electricity of the top 10 outbound states is 15.99 cents per kilowatt hour. This represents a premium of over 49% higher than the costs for the top 10 inbound moves states.

Taxes

The average top state corporate tax rate for the top 10 states for inbound moves is 5%. This compares to the rate of 8% for the top 10 states for outbound moves. Corporate taxes are often cited as significantly hampering business and economic growth. Many companies have made announcements about relocating from one state with comparatively high taxes to another state with comparatively low taxes.

Employment

Growth in jobs and employment is a key indicator of a state’s economic health. The United States Department of Labor’s Bureau of Labor Statistics considers job growth of 100,000 or more to have a very positive and long-lasting impact on economic growth. The Bureau’s Current Labor Statistics Highlights show that nonfarm payroll employment increased by 128,000 in October 2019. The Bureau also revised the August and September figures significantly upward, again reflecting more favorable economic performance and health. For October 2019, the state of Arizona gained 31,600 nonfarm jobs.

What Should Employers do About Inbound Moves?

Employers in the top 10 states for inbound moves should expect a rise in demand for workers as more residents move into their state. Inbound moves generate a significant economic impact on a location. As a result of inbound moves, new businesses and residents require products and services sourced from the local area, such as:

  • New home construction
  • Insurance policies
  • Educational institutions
  • Retail sales
  • Mortgage services
  • Infrastructure
  • Entertainment establishments
  • Cultural institutions

Companies should review their hiring needs, corporate objectives, and relocation programs. Employers may need to consider offering relocation benefits to attract top talent with specific skills and training. They should also look into pre-hire assessment tools to identify the most qualified candidates for their job openings.

Conclusion

GMS’ team of corporate relocation experts has helped thousands of our clients understand how to respond to labor and economic market forces such as inbound moves to growing states. Our team can help your company by using industry best practices to design your relocation program.

GMS was the first relocation company to register as a .com, created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

Global Mobility Solutions is proud to be named and ranked #1 Overall, and #1 in Quality of Service by HRO Today’s 2019 Baker’s Dozen Customer Satisfaction Survey.

Contact our experts online to discuss your company’s interest in learning more about how to attract employees in the top 10 states growing due to inbound moves, or give us a call at 800.617.1904 or 480.922.0700 today.

Request your complimentary relocation policy review

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Corporate Relocation Corporate relocation tips Domestic Relocation Domestic Relocation Challenges Domestic Relocation Tips Domestic Relocation Trends Household Goods United States Economy

Tri-State Regional Economy May Encourage Relocation Opportunities

The tri-state regional economy encompassing New York, Connecticut, and New Jersey may encourage future relocation opportunities. This area includes large swaths of southeastern New York, as well as parts of the Hudson River Valley. It also includes the western end of Long Island, northern New Jersey, and southwestern Connecticut.

This large and dynamic metropolitan area accounts for nearly 10% of the United States entire Gross Domestic Product (GDP). Within the state of New York, the city of New York serves as the center of activity. As a result, commuting patterns across the area reflect the draw of New York City as an engine of job growth.

Tri-State Regional Economy: Industries

Several industries maintain a major global presence in New York City and throughout the metropolitan region, including:

Annually, the overall tri-state regional economy produces goods and services valued at $1.5 trillion. This is more than most other nations, placing this region within the world’s twenty largest economies.

Tri-State Regional Economy: Housing

The cost of living in New York City is 148% of the US average, making it the most expensive. The largest component of this cost of living is the cost of housing. Demand for housing near employment centers tends to drive up its cost. The tri-state regional economy reflects significant differences in housing costs. These costs often vary widely based on several factors including proximity to New York City, access to transportation networks, variety and availability of the local housing stock, amount of household goods to move, local neighborhood amenities, and overall desirability of the location.

Median Home Values (reported by Zillow/October 2019)

New York City/Manhattan: $1,190,800

Hudson River Valley/Sleepy Hollow: $730,800

Western Long Island/Hempstead: $375,300

Northern New Jersey/Englewood: $381,200

Southwestern Connecticut/Stamford: $284,800

Apartment Rents (reported by RentCafe/October 2019)

New York City/Manhattan: $4,336

Hudson River Valley/Sleepy Hollow: $2,046

Western Long Island/ Hempstead: $1,877

Northern New Jersey/Englewood: $2,322

Southwestern Connecticut/Stamford: $2,459

Industry Growth Leads to Outsize Commuting Patterns

The tri-state regional economy is highly diverse. This diversity benefits the area’s overall growth, as job seekers can easily find opportunities. Commuting patterns reflect the status of New York City as the region’s engine for jobs. The state of New York taxes income that commuters from New Jersey and Connecticut make from jobs they hold in New York. As a result, the New York state government gains significantly more tax revenue.

Nonresidents account for approximately 15% of total income taxes owed to New York, in the amount of $6.2 billion. Of this $6.2 Billion:

  • New Jersey residents account for $3.1 Billion, 50% of the total
  • Connecticut residents account for $1.2 Billion, nearly 20% of the total

Financial Impact on Commuters in the Tri-State Regional Economy

Due to differences in tax rates and other factors, the financial impact on commuters into New York may be difficult to discern. Some states give credit for taxes paid to other jurisdictions. However, the state of New York does not offer any credit for commuters.

New York City generates a large number of high-paying jobs, and wages for many occupations are higher in the city than elsewhere around the tri-state regional economy. Residents in New Jersey and Connecticut who obtain jobs in New York City may initially look at the cost of a train ticket or a few added toll costs as their only additional expense. However, the true costs may include:

Direct Costs

  • Parking costs at transportation system lots
  • Train, subway, or bus ticket costs
  • Car maintenance costs for driving to lots or into the city
  • Toll costs
  • Automobile insurance costs
  • Extra tax liability to New York State government
  • Extra tax liability to New York City government
  • Higher costs for food and drinks purchased in New York City
  • Increased taxes on goods purchased in New York City
  • Higher costs for employee’s share of employer-provided benefits

Indirect Costs

  • Loss of time for family and social obligations due to increased length of commute
  • Increased exposure to occupational stress factors such as crowds and noise
  • Higher tendency to develop stress-related illness

Some estimates of the true costs of commuting indicate a cost of $795 or more for each mile someone lives from their job. Assuming someone’s job is at 14 Penn Plaza, 225 West 24th Street, in New York City, estimates from these locations following the fastest route using Google maps might indicate the following:

New York City/Manhattan: 2.9 miles, $2,305.50

Hudson River Valley/Sleepy Hollow: 28.8 miles, $22,896.00

Western Long Island/Hempstead: 27.3 miles, $21,703.50

Northern New Jersey/Englewood: 14.7 miles, $11,686.50

Southwestern Connecticut/Stamford: 40.5 miles, $32,197.50

Relocation Opportunities in the Tri-State Regional Economy

Relocation Outside the Region

Employers that have large numbers of workers who commute into New York City should determine if the company can benefit from relocation. Advances in technology permit many functions to be easily and seamlessly performed regardless of location. Many firms based in New York City or that have significant operations there have embarked on similar initiatives, hoping to leverage technology while reducing costs. Relocation may include global destinations such as the country of Poland or domestic destinations such as Salt Lake City, Utah.

Relocation Within the Region

Even within the tri-state regional economy, relocation might be local in nature. It may include moving corporate functions from New York City to New Jersey or Connecticut. Alternatively, it may include moving those functions from these states to New York City. For example, Diageo is relocating from Norwalk, Connecticut, to New York City, to help the firm find a stronger base of employees with marketing talent. Wright Investors’ Service is relocating from Greenwich, Connecticut, to Shelton, Connecticut, because many of the firm’s employees live in that area and the move will help the company reduce long in-state commuting patterns. Credibility Capital relocated from New York City to Newark, New Jersey with the aid of a significant state incentive in the amount of $6.5 million.

What Should Employers do About the Tri-State Regional Economy?

Companies in the tri-state regional economy should examine their need to maintain operations in a specific location. For example, some companies have operations that function in a distinct location such as the New York Stock Exchange. There may be opportunities to utilize relocation for operations that support the positions that remain tied to this location. As a result, both the organization and many employees may benefit from reduced direct and indirect costs related to commuting patterns

Companies should also work with a qualified and experienced Relocation Management Company (RMC). RMCs can help companies design a robust talent acquisition program. Also, RMCs can help a company design an industry-leading relocation program that will give them a competitive advantage in the market for highly skilled employees.

Industry Benchmarking Studies Help Employers Compare Their Relocation Program

GMS has recently published several Industry Benchmarking Studies to help employers learn whether their company’s relocation program is designed following industry-specific best practices. There are many benefits to a corporate relocation policy benchmarking. For example, employers can learn how their relocation program compares to those offered by competitors in their specific industry.

Companies that relocate to gain access to a base of talent with knowledge and skills should review their relocation program to ensure that at a minimum it matches what competitors provide. RMCs may provide specific recommendations to help the company’s relocation program excel in talent acquisition based on specific industry practices.

Industry best practice is to schedule a relocation program and policy review every 12 to 18 months to ensure your company maintains its competitive position. This review will also help your company learn about how the relocation industry is evolving to meet increased employee demands. Importantly, it will also include a review of commuting costs and patterns in the tri-state regional economy.

Conclusion

GMS’ team of corporate relocation experts has helped thousands of our clients understand how to leverage relocation in the tri-state regional economy to gain benefits, reduce costs, and attract and retain talent. Our team can help your company by using industry best practices to design your relocation program. This will increase your company’s ability to attract and retain new employees.

GMS was the first relocation company to register as a “.com.” The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

Global Mobility Solutions is proud to be named and ranked #1 Overall, and #1 in Quality of Service by HRO Today’s 2019 Baker’s Dozen Customer Satisfaction Survey.

Contact our experts online to discuss your company’s interest in learning more about relocation opportunities in the tri-state regional economy, or give us a call at 800.617.1904 or 480.922.0700 today.

Request your complimentary relocation policy review

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Corporate Relocation Corporate relocation tips Relocation Best Practices Relocation Technology

What is Blockchain Technology and What Does it Mean for Relocation?

Blockchain technology in its simplest form is a form of record-keeping. The digital world records information. Then, recipients store this information in a database. Specifically, the components of blockchain technology include:

  • Block: digital information
  • Chain: public database

What is a Block?

Blocks include three specific pieces of information:

  1. Transactional data such as date, time, dollar amounts
  2. Identity of transaction participants, using unique digital signatures (not actual names)
  3. Hash: a unique identification code stored in a block to distinguish it from other blocks

What is a Chain?

Chains are public databases:

  1. Transactions are publicly recorded
  2. Public network is based on user trust through a Peer-to-Peer (P2P) network
  3. Digital information is distributed but it is not duplicated
  4. Consensus process ensures adoption of longest chain available (discouraging multiple chains)

How Does Blockchain Technology Work?

Basically, blockchain technology lets multiple users add to recorded information. The process is governed by agreed-upon principles. The information is shared over a decentralized network. There are specific requirements for this technology to work as designed:

  1. Private key cryptography provides authentication for users; possession of the key is ownership
  2. A distributed P2P network oversees the authorization for block activity

Blockchain technology means the basis for transactions no longer relies on trust. Instead of trust, the decentralized network confirms the identity of participants and their ability to perform the transaction.

Real World Examples Using Blockchain Technology

Because blockchain technology is a form of record-keeping, various industries use it in many different ways. For example, an airline can use it to help prevent scheduling conflicts. Transportation companies can use this innovative record-keeping system to manage cargo shipments. Retail companies can use it to track products from source to most recent warehouse or store location.

For industries that rely on information verification, blockchain technology can offer several advantages throughout entire processes:

  1. Data storage that does not require dependence on other organizations
  2. Improvements in programs that reward loyalty by recording activities to a specific chain
  3. Lower costs to develop and maintain trusted relationships in sales
  4. Smart computer programs that can execute contracts without assistance or interference
  5. Speed of transactions can increase dramatically with no need for transaction confirmation by a middleman (banks, credit card companies)

What Does Blockchain Technology Mean for Relocation?

There are several relocation processes where blockchain technology might have an immediate and positive impact if participants adopt it as an acceptable practice. Processes that impact multiple parties and that rely on documentation, information, and verification are ideal blockchain technology candidates, including:

  1. Home Purchase and Sale (recording deeds, executing contracts, verification of identification, authorization for transaction)
  2. Household Goods Moves (initiation of relocation, contracts, authorizations required to proceed, process tracking, delivery confirmation)
  3. Expense Tracking and Reimbursement (initiation of service, documentation of expenses, authorization to approve reimbursement, verification of accounts, deposits of funds)

Ultimately, the entire relocation process from start to finish could be managed within blockchain technology. The more that P2P networks replace disparate systems, the greater reduction there is in expensive verification systems that revolve around trust. Innovation in data and record-keeping in relocation will allow for greater speed of transactions. As a result, processes will become easier for participants who can leverage this data for information and verification.

What Should Employers do About Blockchain Technology?

Employers should stay informed about the use of blockchain technology as it relates to processes in their relocation program. As new opportunities arise to leverage this innovative solution across various relocation processes, employers may be able to gain many benefits including speed and ease of transactions throughout the transferee or new hire’s relocation.

Conclusion

GMS’ team of corporate relocation experts has helped thousands of our clients understand how to leverage new technology for their relocation programs. As a result, our team can help your company learn how blockchain technology can improve the speed and ease of your relocation program’s processes.

GMS was the first relocation company to register as a .com, created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation™ technology platform.

Global Mobility Solutions is proud to be named and ranked #1 Overall, and #1 in Quality of Service by HRO Today’s 2019 Baker’s Dozen Customer Satisfaction Survey.

Contact our experts online to learn more about blockchain technology and relocation, or give us a call at 800.617.1904 or 480.922.0700 today.

Request your complimentary relocation policy review

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Corporate Relocation

States are Enacting Workarounds to Help Businesses Avoid $10,000 Limit on Individual Deductions for State and Local Taxes

Several states are enacting workarounds to help businesses avoid the Federal Government’s $10,000 limit on individual deductions for state and local taxes, or “SALT” deductions. This limit is due to the Tax Cuts and Jobs Act (TJCA) that was signed by President Trump in December 2017. Prior to the TCJA, taxpayers choosing to itemize on their Federal tax return could deduct their state and local income, property, and general sales tax payments. Once the TJCA was signed into law, the new limit became effective.

SALT Deduction Limits Starting in 2018

  1. Capped at $10,000 per return for single filers, head of household filers, and married taxpayer who file on a joint basis.
  2. Capped at $5,000 per each return for married taxpayers who file on a separate basis.

Will the Federal Government Uncap the SALT Deduction Limit?

There is some discussion to remove this limit and “uncap” SALT deductions. However, the independent Tax Foundation analysis of this topic shows this would only benefit taxpayers at the top percentiles. Also, even with the possibility of raising the top individual income tax rate to 39.6%, a move to uncap these deductions would result in less revenue collections for the federal government.

Taxpayers in the top tax brackets gain the most from uncapping the limit. Notably, such a move would make the nation’s tax code less progressive. As a result, taxpayers in the top brackets would receive a tax cut. Therefore, some states are enacting workarounds to help some taxpayers reduce the impact of the new SALT deduction limit.

What Does the Internal Revenue Service Say About How States are Enacting Workarounds?

On May 23, 2018, the Internal Revenue Service issued Notice 2018-54 to state its intention to disallow federal deductions if state tax credits are allowed for individuals relating to charitable deductions. Effectively, some states are enacting workarounds that would allow taxpayers to:

  1. Characterize specific fund transfers as deductible charitable contributions for federal income tax purposes
  2. Use these same fund transfers to satisfy state or local tax liabilities

As a result, these types of workarounds for individual filers most likely will not be allowed. Also, both the Internal Revenue Service and the Treasury Department will issue regulations to clarify for taxpayers the relationship between the SALT limit versus charitable contributions that are deductible for federal income tax filers.

If States are Enacting Workarounds, Will Internal Revenue Service Allow Them?

Several states are enacting workarounds to provide a measure of relief for those who may be able to participate through the use of taxes on specific pass-through businesses. However, it is not clear that all taxpayers can benefit from these workarounds. These programs provide methods that do allow some entities to avoid the $10,000 limit on individual deductions for state and local taxes. The Internal Revenue Service has not yet publicly disallowed these types of workarounds.

Connecticut

The state of Connecticut enacted Public Act No. 18-49 that creates a Pass-Through Entity (PTE) Tax of 6.99% that applies to:

  • S Corporations
  • Partnerships
  • Limited Liability Corporations (LLCs) treated as Partnerships for federal income tax purposes

The PTE Tax provides a tax credit for these entities that is an effective workaround for the SALT deduction limit. The tax credit is a refundable credit that is equal to the shareholder’s, partner’s, or member’s share of the PTE tax paid by the PTE. 93.01% is the multiplier for this amount. This format may become a model for how states are enacting workarounds.

Oklahoma

The state of Oklahoma enacted HB 2665, the Pass-Through Entity Tax Equity Act. HB 2665 creates a similar PTE Tax workaround to that of Connecticut. The Oklahoma corporate income tax rate is currently 6%. Also, the PTEs electing to pay Oklahoma income tax on the entity level will receive an offsetting deduction. This offsetting deduction will be equal to the allocation of state income, gain, loss, or deductions.

Wisconsin

The state of Wisconsin enacted Senate Bill 883. This bill was signed into law and created 2017 Wisconsin Act 368. This Act allows the election of PTEs to be taxed at the entity level. According to the Act, the PTE Tax is 7.9% on the PTE’s net income that derives from Wisconsin. However, this Act does not allow claims for losses and credits, other than a credit for tax paid to other states.

If States are Enacting Workarounds That Will Stand, What Does This Mean?

Several states are enacting workarounds to help businesses avoid the limit on SALT deductions. As a result, employers in these states should take note to provide new hires and transferees with information. The ability to allow PTEs the option to pay tax at the entity level may provide significant benefits for some taxpayers. However, the process may still come under further Internal Revenue Service scrutiny. In all cases, taxpayers should consult qualified tax advisors and professionals for guidance.

What should Employers do?

Where states are enacting workarounds, employers should take notice and identify helpful resources to share with new hires and transferees. The creativity of each state’s tax policy and ability to circumvent SALT deduction limits might provide valuable incentives for new hires and transferees. Relocation Management Companies (RMCs) can provide expert assistance to employers to benchmark their relocation policies and add enhancements that attract talent. RMCs can also identify helpful resources for employers to communicate their state’s position on SALT deduction limit workarounds. They can also identify which states are enacting workarounds.

Conclusion

GMS’ team of global relocation experts has helped thousands of our clients develop relocation programs that attract and retain qualified employees to help your company increase its ease of doing business 2019. Our team can help your company determine how to attract and retain new hires for talent acquisition and management programs.

GMS was the first relocation company to register as a .com. The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation™ technology platform.

Global Mobility Solutions is proud to be named and ranked #1 Overall, and #1 in Quality of Service by HRO Today’s 2019 Baker’s Dozen Customer Satisfaction Survey.

Learn best practices from Global Mobility Solutions, the relocation industry and technology experts who are dedicated to keeping you informed and connected. Contact our experts online to learn about how states are enacting workarounds to SALT deduction limits, or call us at 800.617.1904 or 480.922.0700 today.

GMS is not a tax advisor and is only disseminating public information. Everyone’s tax situation is different; individuals and employers should always consult their tax advisors prior to making any decisions.

Request your complimentary relocation policy review

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Corporate Relocation

Why Companies Should Choose an Industry-Leading Expense Management Program

An industry-leading expense management program will provide a number of benefits for companies. To effectively manage relocation program expenses, a company must devote a significant amount of internal resources. Departments and functions include Human Resources, Accounting, Accounts Payable, Payroll, Tax, and Auditing. Complexity increases in cases of global expense management issues such as foreign currency conversions and payments. Companies should choose industry-leading solutions to ensure department needs are met.

What is the GMS Expense Management Program?

The GMS Expense Management program provides companies with a full and robust cloud-based technology solution. The award winning, world class MyRelocation® portal provides:
  • Online expense submission
  • Easy expense tracking
  • Anytime, anywhere, any device accessibility
  • Payroll reporting that is fully secure
  • Exception cost tracking
  • Custom reporting options
  • Easy to use dashboard

How Does the GMS Expense Management Program Reimbursement Process Work?

The reimbursement process is quick and easy for transferees, for any location where they reside. GMS Expense Management is able to handle multiple currencies, so transferees can submit expenses without having to convert currencies on their own. Reimbursements and invoices are processed within one to two days. All reimbursements are transmitted through Automated Clearing House (ACH) or global wire transfer for quick turnaround. Lump sum payments can be processed before the transferee’s start date.

ACH Network

The ACH network is central to US commercial transactions. Reimbursements are made through direct payment via electronic transmission in an ACH transaction to the transferee’s bank account.

Global Wire Transfer

With a global wire transfer, the transaction is paid for at the sender’s bank. The recipient’s bank receives instructions for deposit. The recipient’s bank then deposits money from its own reserve account to the transferee’s account. Following the global wire transfer, the two banks settle payment on the back end of the process.

Lump Sum

Some companies may provide a lump sum payment to a transferee. GMS Expense Management can easily process lump sums before the transferee’s start date, unlike typical company accounting systems.

How is Invoicing Handled?

The GMS Expense Management program is fully customizable to meet any requirements for coding, frequency, and format. GMS offers several flexible funding options, as well as easy payment terms. GMS also offers prepaid card solutions that provide even greater flexibility for companies and transferees. With a prepaid card, money is already available on the card and transferees have instant access to funds.

How Does the GMS Expense Management Program Integrate with Payroll?

Important payroll functions such as tax calculations and reporting are quick and efficient with GMS expense management. The GMS approach includes:
  • Year-end employee tax reporting
  • US W-2 compensation data calculations, accumulation, and reconciling
  • Regularly scheduling payroll and wage updates
  • Tax assistance calculations that are consistent and flexible
  • Tax coding done in accordance with US Internal Revenue Service guidelines
  • Estimates for assignment and tax costs
  • Expatriate compensation balance sheets and worksheets

Auditing Process

Beyond auditing actual to claimed expenses to ensure receipt accuracy, GMS expense management provides several value added services. Confirming expenses comply with company policy is critical to ensure fair and equal treatment for all employees. The program documents all exceptions to ensure proper approvals are in place. By integrating the company’s policy within the expense management program, it is easy to identify business expenses as compared to those that are truly relocation expenses.

What Should Companies Seeking to Outsource Their Expense Management Program Do?

Companies that are seeking to outsource their expense management program should look into the GMS Expense Management program. GMS provides an industry-leading technology solution for employee reimbursements. Also, GMS provides accurate tax accounting and reporting. Industry standards guide the conduct of all necessary audits to ensure accurate program implementation. Customized reporting options meet each department’s needs for information critical to their function.

Conclusion

GMS’ team of corporate relocation experts has helped thousands of our clients outsource their expense management program. Our team can help your company understand how to benefit from industry-leading expense management solutions. GMS was the first relocation company to register as a .com. The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform. Global Mobility Solutions is proud to be named and ranked #1 Overall, and #1 in Quality of Service by HRO Today’s 2019 Baker’s Dozen Customer Satisfaction Survey. Contact our experts online to discuss your interest in the GMS Expense Management program, or give us a call at 800.617.1904 or 480.922.0700 today.
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Corporate Relocation

What are the Countries That Rank High for Ease of Doing Business in 2019?

In its annual report on the ease of doing business in 2019, the World Bank Group provides a ranking for 190 countries. This ranking reflects quantitative measures on several important business indicators. For example, regulations, protection of property rights, and access to capital are important for businesses to be able to grow and expand markets.

Business Regulation

The 11 specific areas impacting ease of doing business in 2019 that the report covers are:

  1. Labor market regulations
  2. Business startup requirements
  3. Credit availability
  4. Ease of construction including permits
  5. Taxes, rates, and payments
  6. Protections for minority investors
  7. Contract enforcement
  8. Access to utilities such as electricity
  9. Property registration
  10. Cross-border trade
  11. Resolving bankruptcy and insolvency

What does Ease of Doing Business in 2019 Mean?

Across the 11 specific areas impacting ease of doing business in 2019, the World Bank Group notes a number of differences. Some indicators give a higher score for more regulation when it provides for institutions that function better for business activities. For example, a country will receive a higher score in one indicator if it has stricter requirements for related-party transactions that in turn protect minority investors.

What does Ease of Doing Business in 2019 not Include?

The World Bank Group states that the ranking does not account for several important areas. Some of these factors may have a significant impact on business activity. Some factors that the report does not include:

  • Labor force quality measures
  • Infrastructure inadequacies (lack of access to rail, air, ocean, or road transport options)
  • Communication limitations (lack of access to internet, phone, cable, communication options)
  • Financial system development
  • Security issues
  • Costs of tariffs
  • Size of market
  • Pervasiveness of bribery and corruption
  • Costs of international transportation
  • Macroeconomic stability

Top 10 Countries that Rank High for Ease of Doing Business in 2019

The top 10 countries that rank high for ease of business in 2019, and their rank, are:

  1. New Zealand
  2. Singapore
  3. Denmark
  4. Hong Kong SAR (Special Administrative Region), China
  5. Korea, Republic of (South Korea)
  6. Georgia
  7. Norway
  8. United States
  9. United Kingdom
  10. Macedonia, FYR (Former Yugoslav Republic, recently renamed in 2018 to Republic of Northern Macedonia)

New Zealand’s Ease of Doing Business in 2019

The New Zealand economy is stable and robust, with many thriving sectors and a stable system of government, finance, and markets. However, it ranks as only the 53rd largest in the world. The service sector contributes 63% of the country’s Gross Domestic Product (GDP). The largest industries in New Zealand are:

  • Agriculture, including beef cattle, dairy farming, sheep farming
  • Fishing, including trout, oysters, salmon, mussels (often raised at aquaculture farms)
  • Forestry, including timber for the paper-making industries
  • Horticulture, including fruits, wheat, vegetables
  • Mining, including iron ore, silver, gold, coal, limestone

What Does This Mean for Ease of Doing Business in 2019?

Employers in countries that rank high for ease of doing business in 2019 benefit from policies and structures that promote business activity and growth. Growing businesses tend to generate a number of job opportunities. Local communities grow in population and support services and businesses benefit as main industry sectors continue to expand. Demand for employees may be strong, with several solutions such as immigration and favorable provisions for foreign job seekers. Several countries that rank high for ease of doing business in 2019 also rank high as one of the world’s best countries on a number of measures.

What should Employers do?

Employers in countries that rank high for ease of doing business in 2019 should review their company’s growth plans and requirements for jobs across all levels of skill sets. They should also determine how their company’s growth plans will impact the jobs required to meet business plans and goals.

Employers should review their talent acquisition and management programs to ensure they remain competitive to attract and retain new hires and transferees. Relocation Management Companies (RMCs) can provide expert assistance to employers to benchmark their relocation policies and add enhancements that attract talent. Also, RMCs can provide guidance on using the services of International PEO to help companies quickly expand into countries that rank high for ease of doing business in 2019.

Conclusion

GMS’ team of global relocation experts has helped thousands of our clients develop relocation programs that attract and retain qualified employees to help your company increase its ease of doing business in 2019. As a result, our team can help your company determine how to attract and retain new hires for talent acquisition and management programs.

GMS was the first relocation company to register as a .com, created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation™ technology platform.

Global Mobility Solutions is proud to be named and ranked #1 Overall, and #1 in Quality of Service by HRO Today’s 2019 Baker’s Dozen Customer Satisfaction Survey.

Learn best practices from Global Mobility Solutions, the relocation industry and technology experts who are dedicated to keeping you informed and connected. Contact our experts online to discuss your company’s relocation program needs, or call us at 800.617.1904 or 480.922.0700 today.

Request your complimentary relocation policy review

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Corporate Relocation Corporate relocation tips Relocation Best Practices Relocation Challenges Relocation Management Relocation Programs

What are the Top 5 Points a Company Planning to Relocate Should Consider?

A company planning to relocate is usually doing so for several reasons. Some companies operate through extensive planning processes and may have short term objectives as well as long term objectives. When considering a corporate relocation, companies must examine several major factors that will impact their decision. Sometimes these major factors have been known to the company, especially if they experience challenges in talent acquisition and management.

Major Factors that Lead Corporate Relocation Efforts

1. Quality of life considerations for their employees.

This encompasses a wide variety of issues including housing and tax costs, commuting times, access to social and educational venues, and environmental concerns. Opportunities for spouses and partners are critically important for relocating employees to ensure success. Family matters and career support for spouses should be a part of any corporate relocation initiative.

2. Workforce issues such as being closer to employees with the necessary education and technical skills.

Companies seeking to hire talented employees often prefer to be near a locale that has a large talent pool of viable candidates for job openings and growth opportunities.

3. Upgrading facilities and equipment is an important factor for any company planning to relocate.

Some companies currently operating in outdated facilities may be at a competitive disadvantage. Their competitors may have newer facilities with access to new technology, high-speed communication, and other updated amenities. As such, the company can easily upgrade facilities and equipment during a relocation.

4. Access to new markets is a major factor for corporate relocation.

The ability to reach new clients and gain exposure in a new location can help a company reach corporate objectives quickly and successfully. In some cases, a corporate headquarters move is made to provide greater access to capital and financial decision makers. Many large companies have facilities in various locations to gain unique advantages specific to those areas.

5. Cost considerations may be a factor in some corporate relocations.

Many companies take the cost of a location into account. They want to assure continued success as they respond to rising costs and increasing competition

Once a company planning to relocate reaches a decision, there are many points to consider. As it plans for a corporate relocation, a company should consider each point to ensure it is fully aware of potential issues, plans are in place, and preparations are sufficient to ensure a smooth relocation experience.

Top 5 Points a Company Planning to Relocate Should Consider

1. A project team should be in place to plan the relocation.

There are many aspects to consider. Several elements in corporate relocation may take a considerable amount of time for review, discussion, and formulation of plans. Companies considering a corporate relocation should have a written plan. Also, they should review this plan for accuracy to ensure it meets stringent corporate, customer, legal, and operational requirements. Important consideration should be given to the relocation budget. Companies should be fully aware of all the costs their corporate relocation will incur.

2. Contingency planning should be an integral part of a company’s corporate relocation plan.

Outside factors such as weather may severely impact the ability to move people and equipment in a timely manner. For each contingency, companies should identify a proper protocol to ensure the relocation goes back on track as soon as possible.

3. Disruptions may occur.

Proper planning should include a review of backup systems for information networks, customer communications, and employee outreach. In all cases, everyone should have a way to contact the company to ensure business remains ongoing during the relocation.

4. Technology systems are usually the most critical component for a company to consider during a relocation.

Connectivity, security, adequacy of backups, and ability to restore systems should be reviewed to ensure full compliance with corporation needs, customer requirements, and business continuity plans.

5. Communication is a key point for any company planning to relocate.

A company planning to relocate must ensure employees, customers, vendors, and others receive information about the move. Often this is a good opportunity for positive Public Relations (PR) efforts that can highlight the corporate relocation’s benefits in many ways, while giving the company greater exposure to tout their growth and initiatives. Companies should consider the audiences that will receive their message. They should also determine how they will express the traditional PR messages of who, what, where, how, and when.

What Should a Company Planning to Relocate do?

A company planning to relocate should identify all of the factors leading to the corporate relocation decision. Also, the company should consider all of the Top 5 Points that may impact the relocation. Companies considering a corporate relocation should work with a qualified Relocation Management Company (RMC) that has knowledge and expertise in all of the planning and processes inherent to relocation. Corporate relocation experts provide valuable insight. As a result, they can help a company’s corporate relocation process run smoothly, quickly, and with the least amount of disruptions. Engaging a Relocation Management Company early in the process will ensure a company has a knowledgeable partner that can guide them through all phases of the corporate relocation.

Conclusion

GMS’ team of corporate relocation experts has helped thousands of our clients develop plans and processes to ensure a successful and efficient corporate relocation. As a result, our team can help your company planning to relocate understand how to proceed with a corporate relocation. This will keep your company operating at top capacity before, during, and after the relocation.

GMS was the first relocation company to register as a “.com.” The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

Global Mobility Solutions is proud to be named and ranked #1 Overall, and #1 in Quality of Service by HRO Today’s 2019 Baker’s Dozen Customer Satisfaction Survey.

Contact our experts online to discuss your company’s corporate relocation, or give us a call at 800.617.1904 or 480.922.0700 today.

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Choosing a Relocation Company Corporate Relocation Corporate relocation tips Relocation Best Practices Relocation Management Relocation Policy Review Talent Mobility

The Future of Corporate Headquarters

Many companies face challenges when considering where to locate their corporate headquarters. Major global companies such as Amazon, Apple, General Electric, and Google have recently announced expansion or relocation efforts that will take them to their next-generation workforce.

Recent expansion and relocation efforts for corporate headquarters have focused on major metropolitan areas.

Corporate Headquarters of Major Companies

Amazon

Amazon plans to create a second corporate headquarters location in Arlington County, Virginia’s Crystal City neighborhood. The location is across from Washington, D.C. The company said it will receive $573 million combined from Virginia and Arlington in performance-based direct incentives. These incentives include Amazon creating several thousand jobs at the new location. Notably, although Amazon had originally also chosen a second location in Long Island City, Queens, New York for another headquarters, mounting opposition led the company to pull out of its plans. This speaks to the importance of building local support among all stakeholders for any new corporate headquarters development.

Apple

Apple is planning to expand its presence in Austin, Texas with a $1 Billion new corporate headquarters campus. Apple’s future plans will eventually make it the largest employer in Austin. The new campus will accommodate 5,000 employees to start, and feature capacity for up to 15,000 employees.

General Electric

General Electric relocated its corporate headquarters to Boston, Massachusetts in 2016 and instantly became the state’s largest public company. Company officials noted that the Boston metropolitan area’s concentration of top universities and startup technology firms was the main attraction for their relocation. The move is seen as a way for the industrial conglomerate to rebrand itself as a forward-looking technology company. Although GE continues to face challenging markets and a changing economic future, the fundamental reason for the company’s move is shown in their intent to remain in Boston.

Google

Google plans to spend $1 Billion to expand the company’s New York City Hudson Square facility. The campus will be the main corporate location for its New York-based global business organization. The company will double its New York City workforce.

Corporate Headquarters Require Workforce with Significant Skills and Education

Companies looking to expand or relocate their corporate headquarters require employees with skills and education. Typical functions at these locations may focus on executive and managerial roles, product engineering and development, talent acquisition and talent management, sales and marketing, corporate communications, legal concerns, and finance. Many of the positions within these functions require degrees from institutions of higher education. Employees must be proficient with technology across multiple platforms. They must also display a broad range of soft skills including verbal and written communication, coaching, and leadership. Any company looking at a new location should work to keep current employees with desired skills and education during the relocation.

What Should Employers Seeking to Expand or Relocate Their Corporate Headquarters do?

Companies that are looking to expand or relocate their corporate headquarters should work with a Relocation Management Company (RMC) that has expert knowledge and extensive experience in corporate relocation services. Corporate relocation programs provide companies and employees all of the resources and tools they need to ensure a smooth and successful relocation process.

Choose an RMC that provides ongoing employee support services, supplier management, relocation benefits, and expense management. Employers should provide many resources for their relocating employees and their families. As a result, they will feel confident in accepting their new assignments and enthusiastic about the company’s corporate headquarters relocation.

Conclusion

GMS’ team of corporate relocation experts has the knowledge and expertise to help your company manage its corporate headquarters relocation budget. We will also offer your employees the best relocation experience during a corporate headquarters expansion or relocation. This will increase your company’s ability to retain current employees as well as attract new hires at your new location.

Contact our team of experts to discuss how we can help your company’s corporate headquarters relocation budget stay within company guidelines, or call us directly at 800.617.1904 or 480.922.0700 today.

Request your complimentary relocation policy review

Categories
Corporate Relocation

Relocation Expenses Incurred in 2017 and Reimbursed in 2018 are Not Taxable

Photo of a young couple going through financial problems

The Internal Revenue Service has ruled that relocation expenses incurred in 2017 and reimbursed in 2018 are not taxable. Prior to this ruling, employers had been treating such reimbursements as taxable income for transferees. As a result, employers had been withholding federal taxes on that income.

How did this tax issue arise?

The issue arose as a result of the 2017 Tax Cuts and Jobs Act. The Act suspended the exclusion from income for qualified moving expenses paid or reimbursed by an employer. However, many moves actually occurred in 2017 with final accounting and reimbursement occurring in 2018. As a result, several transferees do not have clarity regarding their 2018 tax obligations.

What does the IRS rule state?

Notice 2018-75 provides that amounts reimbursed for 2017 moves are not taxable even if they are paid or reimbursed in 2018. Employers that have included relocation expenses in individual’s wages or compensation may use the adjustment process under Section 6413 or the refund claim process under Section 6402. These processes allow the employer to correct the overpayment of federal employment taxes.

What does this mean?

Transferees with a qualified 2017 move will not owe taxes on any amounts paid for or reimbursed by their employer in 2018. Qualified moves include those that are work-related, and for which relocation expenses would have been deductible if the employee had paid them in 2017. Also, the employee must not have already claimed these expenses as deductions in 2017.

What should employers do?

Employers who have been withholding federal taxes on such amounts should process adjustments for these overpayments. Employers should not include reimbursements and amounts paid for qualified 2017 moves and relocation expenses as income for the affected employees.

Conclusion

GMS’ team of corporate relocation experts has helped thousands of our clients understand how to respond to the impact of changing tax and other regulations. Our team can help your company understand how best to proceed with this new IRS ruling. We can help your company understand how it relates to employee income, federal tax withholding, and moving expense reimbursements.

Contact our experts online to discuss your company’s relocation program needs, or give us a call at 800.617.1904 or 480.922.0700 today.

GMS is sharing public knowledge and can help companies more clearly understand the law regarding relocation expenses. However, GMS is not a CPA firm and is not giving tax advice. Everyone’s tax situation is different; individuals and employers should consult their tax advisors prior to making any decisions.

Request your complimentary relocation policy review

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